Unless you’re a fiscal policy wonk (don’t be ashamed if you are), you may not know that North Carolina needs to figure out how to keep a more than $25 billion promise.

House Bill 24 and Senate Bill 22 would create a committee to study options for covering the future cost of paying for the future health care costs of retired state workers. There is no easy fix, but here are a few things to keep in mind as this debate unfolds.

We’re not in crisis yet, but this is a serious concern. Like most states, North Carolina currently relies on a pay-as-you-go model for covering the health care costs of retired state employees, meaning that we are paying now for the health costs of retired state workers, essentially paying for service to the state that has already been rendered. This also means that we have not set aside funds for future retiree health care costs, which is commonly referred to as an “unfunded liability.” North Carolina’s unfunded obligation to state workers has increased over the last few years and it is projected to continue growing. Unfunded retiree health benefits are not broadly seen as a crisis yet, but the current trajectory is toward needing larger and larger yearly appropriations to pay for retired state workers’ healthcare.

We should not balance our books on the backs of people who have served our state. HB 24 and SB 22 identify several possible options for reducing the size of North Carolina’s unfunded obligation to retired state workers (all of which were previously studied by the Program Evaluation Division of the General Assembly in a 2015 report). Unfortunately, several of the specified alternatives would impose the costs on current and retired state workers, the people who teach our children, pick up our mess, safeguard our communities, and do myriad other jobs that make North Carolina a great place to live. In the future, these moves could dramatically undermine our ability to recruit dedicated and talented people into public service. Many state employees have not seen a meaningful raise in years, which is already making it hard to recruit workers, and that challenge would only compound if we start walking back promises we have made to secure the retirement of state workers. Read more

Recent executive actions and words are likely to cost more lives than they save, and they are already eroding the United States’ standing as a bulwark for democracy and human rights. Beyond the social and political consequences, these decisions could have profound and long-lasting economic ramifications as well.

As we documented in a report from 2015, immigrants are essential to the economic health of communities across North Carolina, both rural and urban. Among other important economic facts, the report provides evidence for three central economic lessons that we should keep in mind right now.

Welcoming communities are more prosperous: On average, counties with large immigrant populations have lower unemployment rates, lower levels of poverty, and higher wages than counties with few immigrants. Even just comparing among rural communities, counties with larger immigrant populations generally fare better than counties with fewer immigrant residents.

Immigrants are essential to the small business community: Main street North Carolina would suffer dramatically if immigrants were not swelling the ranks of willing local entrepreneurs. More than 20% of Main Street business owners in North Carolina are immigrants and immigrants account for more than 80% of the new Main Street business owners since 2000. The next time you drive down Main Street, or visit your local shopping mall, imagine what it would look like if 4 out of every 5 business opened since 2000 were still shuttered.

Revitalizing neighborhoods and reversing population decline: Both as entrepreneurs and residents, immigrants have helped to breathe renewed life into communities across the state. The majority of immigrants live in North Carolina’s urban areas, but some of the most profound local benefits have been felt in small towns and rural communities where immigrants have muted or reversed population decline and bolstered local economies. In fact, nine of the ten counties that have seen at least a tenfold increase in immigrant residents since 1990 are in rural parts of the state.

Depictions of the North Carolina economy range from overly rosy to falsely apocalyptic, but the reality falls squarely in the middle, according to labor market data released today. The final state-level economic readings for 2016 show a decidedly mixed economic picture.

“These have not been the best of times, but they haven’t been the worst of times either,” said Patrick McHugh, policy analyst with the Budget & Tax Center, a project of the NC Justice Center. “The United States has experienced the longest period of a national economic expansion in generations over the last six-plus years. But growth has been modest, wages are just starting to improve, and some communities have never fully recovered.”

The December labor market data underscore a number of important economic realities, including: Read more

You’re not imagining it, 2016 was an unbalanced economic year. The national economy had one of its best years in the last decade, and some parts of North Carolina significantly outpaced the nation, but many communities were left further behind.

Over half of North Carolina’s counties have not recovered to pre-recession employment levels. While many parts of the state have finally surpassed pre-recession employment levels, 52 of North Carolina’s counties still have fewer jobs than before the Great Recession took hold. Nine North Carolina counties actually lost jobs during from November 2015 through last month, a particular worry given that 2016 saw decent growth nationwide. Read more

Amidst the flurry of activity at the General Assembly special session this morning is a less flashy but nonetheless vital bill, HB6, which would massively reorganize the digital backbone of state government. The proposal has not received a great deal of attention, but could have far-reaching consequences.

HB6 – Independent State CIO – would create an independent Department of Information Technology (DIT), headed by a nominee of the Lt. Governor and confirmed by the General Assembly. DIT has the power to oversee IT functions across state government, including:

“Approve selection of respective agency chief information officers.”

Review IT appropriations and expenditures for each State agency.

Compel agencies to report on IT “assets, systems, personnel, and projects.”

Determine how IT “assets, systems, and personnel are provided and distributed among agencies.”

It remains unclear what problem HB6 addresses or how this bill is the answer. However, given the importance of IT to all functions of state government, an independent CIO could effectively block administrative priorities and programs.

HB6 raises some crucial questions without offering any clear solutions to an existing issue. How many other states don’t give a gubernatorial appointee the authority to coordinate IT functions across state government? Could this change create additional IT costs that would take away from other state needs? How many other state agencies are headed by a nominee of the Lieutenant Governor and confirmed by the General Assembly? For that matter, how many private companies would prevent the Chief Executive Officer from overseeing the Chief Information Officer?

Even if there are reasons to look at how IT functions are coordinated across state government, effective reform requires a great deal more assessment and reflection than has been allowed thus far.

Upcoming Events

Friday, Feb. 16

12:00 PM

Crucial Conversation – Prof. Peter Edelman discusses his new book, Not a Crime to be Poor: The Criminalization of Poverty in America

Prof. Edelman is coming to the Triangle to mark the 50th anniversary of Durham-based nonprofit MDC. His visit is the first of a series of MDC-sponsored events focused on ways that Southern leaders can work together to create an Infrastructure of Opportunity that shapes a South where all people thrive.”